New Delhi: India and Afghanistan on Monday decided to intensify their cooperation, especially in the economic sector as they inked four pacts, including one on cooperation in development of coal and mineral resources and Indian aid for implementation of small development projects.

Prime Minister Manmohan Singh held discussions with Afghan President Hamid Karzai, who is in India to seek investments in his war-torn country, on the entire gamut of bilateral ties as well as challenges confronting the region.

"We also discussed changes in the security and political situation in and around Afghanistan. I expressed to President Karzai our belief that sustained international support and cooperation in all respects, including in combating terrorism emanating from the neighbourhood, will help Afghanistan meet these challenges," Singh said at a joint media event.

Reaffirming the "shared vision of a stable, strong, united, sovereign and prosperous Afghanistan", he said India remains committed to supporting Afghanistan in its development efforts and noted the country's development assistance to Afghanistan currently stands at approximately $2 billion.

"We discussed the need to develop a strategic economic partnership, which will build on our economic synergies for mutual benefit. I also reiterated to President Karzai our belief that Afghanistan s regional economic integration will contribute to overall prosperity and stability in the region," Singh said.

Thanking India "for the generosity they have shown to us in the past many years", Karzai said, "In particular India has been a very generous frontline partner and supporter to Afghanistan's reconstruction and development. India has strived with us for the hard-earned income of its people and the difficult walk that we had for development and reconstruction."

He also made it clear that this time he was here to woo investors. "My visit here this time is focused in talking to and asking and requesting Indian business to come to Afghanistan.

"Investment opportunities in Afghanistan today are better. A country that is more confident of its future and is willing to receive investments from its friends, specially from India. And I was happy to see today the signing of certain agreements and MoUs in this regard."

The four pacts inked were Indian Grant Assistance for Implementation of Small Development Projects through local government bodies, community organisations, cooperation in the field of fertiliser sector, cooperation in youth affairs and cooperation in the field of development of coal and mineral resources.

The two sides also decided to intensify the cooperation with a special focus on deepening their economic engagement in areas ranging from agriculture and small businesses to mining and infrastructure.

The Prime Minister also noted that India has expanded its programmes for capacity-building, institution-building and human resource development.

Karzai, who landed in Mumbai on Friday, had told India Inc not to be "shy" when it comes to investing in his mineral-rich country and pointed out to them of the gains reaped by the Chinese who invested early in the war-ravaged country. "Indian businesses need not be shy when thinking of Afghanistan," he said in Mumbai.

Asserting that his administration will do all things possible and accord special treatment to Indian investors, the Afghan President had said, "We would like to give you a better platform. We would like to welcome you on a red carpet and others on a grey carpet. But you need to arrive on the red carpet. If you don't arrive on the red carpet, it will get dusty. Therefore, do hurry up in coming and take advantage of the opportunities in Afghanistan."

In 2011, a consortium of Indian companies won the bid to develop Afghanistan's largest iron ore deposits. Afghanistan is believed to have mineral reserves worth at least $3 trillion which could generate billions of dollars in tax revenue.